Capacity Utilization Rate Rising at Taiwan's LED Makers

Taipei, March 22, 2012 (CENS)--While Lextar Electronics Corp. estimates its production will run at full capacity by end of the second quarter at the earliest and Genesis Photonics Inc. has been inundated with orders this month, Everlight Electronics Co., Ltd. and Epistar Inc. say their capacity utilization rates are ramping up towards 100%.

Y.F. Yeh, chairman of LED packager Everlight, pointed out that recovery of the LED market has taken hold as a whole and the market is likely to continue moving up quarter on quarter this year as long as macro economy remains steady.

He estimated that the company's capacity utilization rate would reach 100% in the third quarter this year, up from the current level of 60-70%.

Chipmaker Epistar projects its production of red chips to reach full capacity in April at the earliest, and with production capacity rate for blue chips to reach 90% then.

Epistar is struggling to make a profit this year out of a loss of NT$0.73 per share recorded in the fourth quarter last year. Climbing demands from backlight suppliers have driven up the company's capacity utilization rate to 80% this quarter. The company projects the rate to further rise to 90% in the second quarter.

With gross profit rate falling under 20% throughout last year, Genesis has made it a top priority task for the year to raise profit by raising capacity utilization rate. The company fears that oversupply will remain this year, spoiling the company's goal.

Lextar estimates it will end this quarter with capacity utilization rate reaching 70% mostly thanks to LED backlight market. The LED lighting market is expected to bring the rate to 100% in the second quarter.

The company swung to a loss of NT$0.49 per share in the fourth quarter from a profit, prompting the company to set capital expenditure for this year at NT$2 billion (US$66 million at US$1: NT$30) or so, compared with last year's NT$3 billion (US$100 million).